What is Bankruptcy?
Bankruptcy is a legal mechanism that provides expansive, comprehensive debt relief. Bankruptcy debt relief allows people to discharge many different kinds of debt, such as credit card bills, medical bills, and many other debts that tend to adversely affect peoples’ financial well-being.
In addition to comprehensive debt relief, Bankruptcy law also stops wage garnishments, debt collectors’ harassing telephone calls, home foreclosures, and other burdens that tend to accompany overwhelming debt.
Bankruptcy law provides these benefits in order to give honest, hardworking people a fresh start toward a healthier financial well-being.
Many clients have concerns about filing for bankruptcy, and rightfully so – it is a very difficult decision to make because there are a lot of questions to consider. However, there is a lot of misinformation about filing for bankruptcy and the debt relief that it provides. In fact, there is so much misinformation that many people do not even consider filing in the first place.
Many of these concern derive from myths disseminated by the very same creditors that want to prevent you from obtaining bankruptcy debt relief!
The most popular myth is that you will never be able to obtain a credit card or mortgage after filing. This is patently untrue. Most clients are able to get a credit card, often times within less than a year, after obtaining bankruptcy debt relief. Further, most people are able to successfully get a mortgage within 2-3 years after filing for a bankruptcy.
Another common myth is that a creditor has the power to stop you from filing for bankruptcy. This is simply a lie. Some creditors will even suggest that their debts will not be discharged by bankruptcy! This, too, is often times untrue. No creditor has the power to stop you from filing for bankruptcy. It is your legal right. Any creditor that has advised you differently has told you a lie.
A third common myth is that individuals must sell all of their property before being eligible for bankruptcy debt relief. Not only is this untrue, but also perhaps one of the most harmful bankruptcy myths ever told. It truly breaks my heart when I see honest, hardworking people empty their entire life-savings, IRA’s, and other pensions before filing for bankruptcy. Especially because these are the types of accounts that can actually be saved through filing a bankruptcy!
The bottom line is that there are many myths that are designed to deter you from even considering bankruptcy. Thus, in order to determine whether bankruptcy debt relief is right for you, it is important that you speak to a knowledgeable and competent bankruptcy attorney about all of your debt relief options.
Chapter 7 vs. Chapter 13 Bankruptcy
There are two main types of bankruptcy relief that consumer debtors can benefit from: Chapter 7 and Chapter 13.
The first type of consumer debt relief is known as Chapter 7 Bankruptcy. A Chapter 7 filing allows consumer debtors to discharge most, if not all, of their debts in one fell swoop. Chapter 7 even gives you the choice of walking away from car loans and/or mortgage payments that are harming your financial well-being.
The second type of consumer debt relief is known as Chapter 13 Bankruptcy. A Chapter 13 filing allows debtors with either more income, or equity in their assets, to design a carefully structured repayment plan. The repayment plan is paid over a course of 3-5 years, in order to give clients some breathing room to reorder their financial affairs. At the end of the plan, a consumer debtor obtains additional debt relief when your remaining debts are discharged.
Both of these plans provide comprehensive debt relief, but are designed to achieve your debt relief goals differently. It is important that you speak to a competent, knowledgeable bankruptcy attorney before deciding which type of bankruptcy relief is right for you.
How long does it take to file?
A bankruptcy filing is not very time consuming at all. In fact, we strive to make the process and streamlined and stress-free as possible.
The process begins with a scheduled visit to my office. At this time, you will provide me with some information about your financial situation, as well as information about the debts that you owe. Using this information, I will prepare the “petition” that we will file with Bankruptcy Court in order to obtain the debt relief that you desire.
Normally, the petition does not take longer than 45 minutes to an hour to prepare. While I could probably do it more quickly on my own, I believe it is critically important to explain each of your debt relief options, every step of the way. As a result, you will be armed with the important information that you need to make a final, informed decision about your debt relief goals.
What Debt qualify for Bankruptcy?
Bankruptcy debt relief has the power to discharge a broad range of consumer debts. In fact, it would probably be easier to list the types of debts that a bankruptcy does not discharge! As a general rule, a bankruptcy filing does not get rid of student loans, child support obligations, or taxes/fines owed to government.
Bankruptcy is a powerful, debt relief tool. But it is important that you consider that types of debt that you want to get rid of before filing. Please contact a competent, knowledgeable Bankruptcy attorney to discuss all of your debt relief options.